Golf not coal is the future for RJB property portfolio

RJB Mining, the rump of the privatised British coal industry, will this week unveil its strategy to become a major national property player. The move could see the company operating golf courses and industrial estates along with deep and opencast mines.

The company, which last week said goodbye to its chief executive Richard Budge, the abrasive entrepreneur who bought British Coal assets from the Government in 1994 and used his initials to name the company, will publish the results of a review of its 55,000-acre property portfolio when it reports its annual results next week.

RJB's property covers areas where deep and opencast mining take place as well as disused sites and plots bought in the unrealised hope of gaining planning permission for mining.

Analysts are hoping the review of the portfolio, carried out by surveyors Fuller Peiser, will indicate unlocked value. One RJB watcher said property assets alone could be worth 80p a share - or £122 million undeveloped - more than the current value of the whole operation. RJB shares closed on Friday at 80p. Sources close to the company indicated the figure may be close to that, but slightly lower.

Meanwhile, it has emerged that Budge received more than £700,000 as a payoff, comprising a year-and-a-half of his £320,558 salary, a 25 per cent bonus and pension entitlements. Previous estimates had been considerably lower. Management, led by chairman John Robinson, hopes he will not sell down his stake in the company, although he has made millions from doing so in the past.

RJB has also written to employees assuring them that all current mining operations will be kept open for two years and that there will be no job losses.

Executives believe emphasising the value of the property assets is a sensible way forward for mining businesses, which often collect large portfolios. They see little prospect of growth in the UK. There are overseas precedents - Drummond in the US and Bisichi of Nigeria both exploit property portfolios. Options for the RJB land, most of which is brownfield, include sale - although the Government would claw back part of any gains - development as either as industrial or leisure parks, or joint ventures, potentially with housebuilders.

Much of the land is in South Yorkshire, Derbyshire and Nottinghamshire, with potential development close to the M1 motorway.

RJB is expected to announce pre tax profits for last year of £10m, and to raise its final dividend by 4p to 11p.